ERHC Energy Inc (ERHE)

[badog]

The story below is indicitive of the risks and time frames of Deep Water explorations.

My guess is that Chevron and Exxon decided that OBO-1 was marginal...and marginal is not what they wanted. Total may be OK with marginal...at the right purchase price of course...as they may have a production cost advantage over Chevron. While an agreement to purchase Chevron's 45.9% interest in block 1 may happen...it is certainly not a done deal...not yet. And if OBO-1 turns out to be marginal...as I suspect...well, I guess the implications would be less than positive.

Deepwater oil is expensive oil
January 6, 2010
Analysis by: Michael Lynch
Analysis of: Cramped On Land, Big Oil Bets At Sea
Published at: www.rigzone.com
Summary
Chevron pays nearly $500,000/day to Transocean Ltd. for a deep water rig that is drilling in 4,300 feet of water in the Gulf of Mexico. This is part of an oil exploration project that has taken more than 10 years. The cost has been $2.7 billion and it may not pay off. Chevron came here because easily discovered fields are mostly a thing of the past. Production from deep water grew by 67% between 2005 and 2008. Discoveries come as giant fields of the last century dry up. The outlook is not good.

Badog